Once in a while, a success unexpectedly begets another success. Repeated again, a second success begets a dynasty.
Dynasties have certain characteristics. Among these are:
1. A “halo” effect conferred on later generations by the shared glory of the first success.
2. Imputed right of the dynastic family to be left alone by the “common” people.
3. Increasing detachment from the focus of the business; ego takes over.
4. Increasing dismissal of the basis of the power; “It’s my turn.”
The longer a dynasty persists, the more the seeds of its inevitable demise blossom.
The dynastic founder is often a “rags-to-riches” unexpected success overcoming great odds against success. The founder generally displays a genius for organization, creative talent, unstinting drive for success; an unstoppable force.
The second generation is often forced to work in the dynastic business, like it or not. The founder makes it clear that there is no choice. The second generation also works hard under the critical eye of the founder and thus no deviation from success is permitted. The second generation rankles at the hardship and promises itself that the next generation will be given more freedom.
The third generation accepts that freedom as a birthright, apparently requiring no attention to maintain. The money and the power have always been there. Some of the third generation members begin to drift away from the core precepts that created the dynasty; self-actualization is encouraged. Some even begin to rebel as long as the money and prestige continue.
Thereafter, the dynasty descends into disassociation; nobody knows what to do and nobody cares. What’s the problem? The money and the power have always been there. Slowly the core business fades away with nothing to replace it.
So the dynastic arc is this:
• Founder creates the business from a shoe-string, innovates, plans, executes and sets the dynasty on a firm foundation.
• Second generation builds the business, transitions to a structure that does not rely on a single person to be sustained. Growth may slow but stability increases.
• Third generation begins the long slide caused by a sense of entitlement and a weak work ethic.
• Subsequent generations have run out of the founder’s zeal and vigor and the business becomes a weak, dried-up husk that is blown away in the next breeze.
Real-world example? The Kennedy dynasty.
Founder Joseph P. Kennedy made his start during Prohibition, bootlegging Canadian liquor reputedly in association with Mafioso Joseph Costello. This generates massive streams of money. Kennedy saw that Prohibition was not forever and that he must move into another business. He moved into the stock and commodity markets and converted his bootlegging fortune into a stock trading fortune using insider trading. Roosevelt appointed him chairman of the Securities and Exchange Commission; Kennedy then outlawed insider trading.
Second Generation. Joe P. decided that Army Air Force Captain Joe Kennedy Junior needed to be President. This plan was thwarted when Joe Jr. died piloting a bomber. Undaunted, Joe Sr. decided that John F. Kennedy needed to be President. Joe Sr. focused all energy on attaining this goal, and succeeded. Senator Robert Kennedy made a name for himself grilling mobsters in the Senate. JFK appointed RFK to Attorney General, who continued to chase the mob even though he had never argued or tried a case. Ted Kennedy became a Senator as well, and after a failed Presidential campaign, distinguished himself by being found innocent of the death of Mary Jo Kopechne after he drunkenly drove his car off a bridge at Chappaquiddick. JFK and RFK were both assassinated and Ted Kennedy became the moral leader of the Democrat party.
Third Generation. Too many for a complete list, but two stand out. Joe (son of RFK) made friends with Hugo Chavez who sold Venezuelan heating oil to Kennedy at deep discounts, which was then distributed to low-wage Americans, making Kennedy millions and establishing his credentials as a champion of the poor. RFK Jr. made a name for himself by claiming that vaccines cause autism, likening it to “the Holocaust” [Daily Mail, UK] He retracted the claim after a firestorm of criticism.
Only the dry husk remains.
The arc of the Bush dynasty runs like this:
First Generation: Samuel Prescott Bush – Started as manager of a small Connecticut rubber products factory. A loan from Republican financier father-in-law George Herbert Walker set him on a path to become a successful Wall Street banker and eventually a Republican Senator from Connecticut.
Second Generation: George H. W. Bush – Served as Vice President under Reagan followed by a single term as President. A loan from a son of the Walker family made it possible for him to become an oil millionaire before the age of 40.
Third Generation: George W. Bush – Served as Texas Governor and twice served as President. Made his personal fortune in oil exploration.
The Bush dynasty seems to have run the same course. Does the Jebster really seem to be Presidential material?
I think not.